[beagle3]

Were you ever an employer?

If your salary is 10,000SEK/month (to make numbers simple), then you cost your employer 13,100SEK/month. You pay 3,000 SEK in taxes, so your take home is 7,000/13,1000 = ~55%, and the tax rate is 45%.

If the employer didn't have to pay those 31% to the government, he would have paid them to you, and you would have been taxed on them.

It doesn't matter how the line items are listed from the employer's perspective, and it shouldn't matter to you. Just assume that this appears as another line item, and also a grand total "employer expense". This is what you negotiate when you negotiate your salary - not the 10,000 SEK.

[mongol]

Someone here asked what you get for the Swedish taxes. This is the post to tie in to to describe how Swedish welfare is funded.

What is called "employment tax" in the thread above, partly is a kind of insurance premium. For example, of the close to 32% that are added on top of the "salary you see", 11% goes to pension, 5% pays mandatory sickness insurance, 2,6% pays for maternity / paternity leave privileges. That gives you kind of sense "what you get for your taxes in Sweden".

The 30% that everyone pays of their salary goes for services in their local municipality: schools, child care, care for the elderly, hospitals, roads, local infrastructure such as water, drains etc,, and also subsidies for commuter traffic.

The approx 20 % that are added on top for some, together with the 25% sales tax is taken by the government, and goes into the national budget.

[kalininalex]

> If the employer didn't have to pay those 31% to the government, he would have paid them to you, and you would have been taxed on them.

It's unlikely the employer would pay you more. You negotiated and expect 10,000 SEK. Yes, the employer knows it'll cost 13,000, but you only get 10,000. So if there's no employer tax, you'll still likely get 10,000, but now the employer can hire another person using the money that's freed up, or invest in some other ways.

[beagle3]

On the first day. But then, a couple of years later, you are smarter and you know that before the tax was canceled, your boss was willing to pay 13,000 SEK to employ you. So the next time you negotiate (possibly with another employer), you know you are worth 13,000 SEK, so that's what you'll demand, and that's what you'll get.

The specific line item in which this expense is listed with the employer, whether "employment tax" or "salary", makes no difference to them, and shouldn't to you.

This is really basic economics.

[luuse]

Yes.

That looks right.

It's a completely different tax, if the employer didn't have to pay that to the government you'd have to renegotiate your salary to get any of it (because it's not part of your salary).

But in Sweden you do negotiate the 10,000 SEK. You generally don't talk about the 13,100 unless you are an employer and have to think about it. That is my point and that is what I think is stupid.

[beagle3]

What you say might be true on the day this tax is canceled, but if you like a few years later, you realize:

a) it was worth 13,000 SEK for your employer to employ you

b) you're only getting 10,000 SEK.

c) you ask for a 3,000 SEK raise, and get it.

So, not immediately, but after a while it will reach the steady state that I described.

The bottom line is: it's arithmetics; It doesn't matter to the employer which line item the 3,000 SEK are listed under, whether "employment tax" or "salary"; it comes out of their pocket either way. It shouldn't matter to you either in the grand scheme of thing. Employment is a reasonably efficient market in the time frame of a few years, and you will realize, and then demand, and get, a salary of 13,000 SEK.

The transient is going to be weird. But in the steady state - it doesn't matter which lines appear in your pay stub and which do not.